Oh so close. We are less than a week away from the biggest sporting event of the year, Super Bowl XLV from Dallas (technically Arlington), Texas. As we all know by now, this year's championship game features two of the most iconic teams in NFL history, the Green Bay Packers and the Pittsburgh Steelers. While many are expecting the game to be one of the closest in recent history, there's one Super Bowl topic that transcends the very game itself – money. More importantly, who's spending it and who's making it? Let's take a look at some of the economics surrounding the battle for the Lombardi trophy. (For a related reading, check out Who's Cashing In On Pro Sports Revenue?) Now consider this, according to the Census Bureau, the median household income for residents of Green Bay and Pittsburgh are $40,857 and $37,461 respectively. That means for the average household in GB or Pittsburgh to purchase two seats in the nosebleeds will cost them well over 10% of their annual income. Toss in a pair of airline tickets (let's ball park it at $500 each), just one night in a moderate hotel ($200), some food and drinks, and a Super Bowl hat each ($25 for the hat), the estimated total to watch their beloved team at the Super Bowl on the cheap - with our rough calculations - is just under $6000, or about 16% of the average annual household income for the fine residents of the Steel City. At least the weather should be nice, oh wait, it's supposed to snow in Dallas this week. (For more, see
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Who's Spending the Money?
First and foremost, it's all about the fans. Every year Super Bowl related spending seems to get larger and larger, and this year is no different. According to Jeff Mosier of dallasnews.com, PricewaterhouseCoopers estimates that visitors to North Texas will shell out a Super Bowl record $202 million on everything from hotel rooms, rental cars and stadium concessions. The previous record was $195 from Super Bowl XLI in Miami Gardens.
Much of the record spending can be attributed to the expected record attendance at Jerry Jones' estimated $1.2-plus billion new Cowboys Stadium, an awe-inspiring 105,000. With so many seats in the stadium you'd think that ticket prices might be somewhat reasonable (as far as Super Bowl tickets go) – not so much. A quick peek at secondary online marketplace StubHub shows that tickets prices range from $2,300-$295,000! The nearly $300K seats are in the Hall of Fame Suites if you were wondering. Or if you'd rather stand outside the stadium and just watch the game on a big screen (and who wouldn't), you can partake for only $200.
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Who's Making the Money?
The better question would be "who isn't?" As far as overall economic impact goes, the estimates vary depending on which economist you ask. As previously mentioned, PwC expects an additional $202 million to flow through North Texas this week, while others peg the number around $40 million. Investopedia's Derek Simon wrote an article on this very topic, you can check it out below. Rather than rehash the "true economic impact" debate, let's see who's actually going to be raking in the dough this week. (To read Derek Simon's Super Bowl article, check out The Not-So-$uper Bowl.)
Now consider this, according to the Census Bureau, the median household income for residents of Green Bay and Pittsburgh are $40,857 and $37,461 respectively. That means for the average household in GB or Pittsburgh to purchase two seats in the nosebleeds will cost them well over 10% of their annual income. Toss in a pair of airline tickets (let's ball park it at $500 each), just one night in a moderate hotel ($200), some food and drinks, and a Super Bowl hat each ($25 for the hat), the estimated total to watch their beloved team at the Super Bowl on the cheap - with our rough calculations - is just under $6000, or about 16% of the average annual household income for the fine residents of the Steel City. At least the weather should be nice, oh wait, it's supposed to snow in Dallas this week. (For more, seeThe Most Expensive Sports Tickets.)
- The Players
Whether you believe that pro athletes are overpaid or not, that doesn't stop them from collecting their pay checks. And while some might think that the playoffs are like unpaid overtime for the players, it's more like an annual performance bonus. Take last year's Super Bowl champion, the New Orleans Saints, who each took home a tidy $83,000 for upsetting the favored Indianapolis Colts. But don't feel too bad for Peyton and his crew, they each received $42,000 for making the trip. Another fringe benefit of being world champions is the jewelry, namely the Super Bowl rings the winning players, coaches and managers receive afterward. While the league gives the winning team a $5,000 (per ring) allowance for up to 150 rings, the Saints ordered nearly 220 rings from Tiffany & Co. (NYSE:TIF) that are rumored to have cost in the neighborhood of $30,000 each. Not a bad haul.
- The Networks
With Fox (Nasdaq:NWSA) having the rights to this year's game, the network has the privilege of charging an arm, both legs and whatever else advertisers are willing to part with to promote their wares in front of a national audience of over 100 million. With 30-second spots going for an estimated $3 million, the Fox network should pull in over $250 million from advertisers. Rumor has it that we can expect to see upwards of 20 auto ads alone during the telecast, as automakers are making a big push for sales to kickstart what they hope will be a strong 2011. Also, our old friends at Budweiser (NYSE:BUD) and Pepsi (NYSE:PEP) should provide some water cooler fodder the following Monday.
- Pizza Parlors
Nothing says Super Bowl party like pizza, and the pizza-makers know it. The "Big 3" in the pizza game (Pizza Hut (NYSE:YUM), Dominos (NYSE:DPZ) and Papa John's (Nasdaq:PZZA)) receive twice as many orders on Super Bowl Sunday than any other day of the year. This year might be their biggest year ever, however, as all three have a lot more than usual riding on the game. Papa John's is running a promotion that if the game goes into overtime (which it never has, but it's hard to remember a game that featured two so evenly matched teams), they will offer a free large pizza to anyone who registers for their online customer loyalty program by 11:59 pm Feb 5.
Pizza Hut is making its Super Bowl commercial debut this year, so management is hoping that their $3-plus million investment will pay dividends when viewers pick up their phones at halftime. And lastly, hotshothedge fund manager Steve Cohen just reported that his SAC Capital fund owns a 5.3% stake in Dominos, that's equivalent to about $52 million. Let's hope for Mr. Cohen's sake that the new recipe for Dominos scores a touchdown with Super Bowl viewers. (For more, see Is Buying A Franchise Wise?)
- Cheeseheads and Towel Wavers
It's been reported that the company that makes those unmistakable cheeseheads that Packer fans wear with such pride has never seen business go so well. Company man Nick Richards told TODAY'S TMJ4 that the company has had to double their staff, and have been sending out shipments daily. Meanwhile, Steeler fans were surprised to find out last week that the man behind their "Terrible Towel" is actually a Packers fan. George McArthur, President of McArthur Towel & Sports, is a die-hard cheesehead and has started manufacturing "Titletown USA" towels to combat the bright yellow Steelers towels their fans will be waving this Super Sunday. I don't know how smart this move is for future business in Pittsburgh, but for this weekend at least, McArthur will be selling the towels by the thousands, to both sides.
- Party Planners and Parking Attendants
While there are probably thousands of other businesses and individuals that will reap the rewards of the Super Bowl economy (most notably the hoteliers and restaurateurs), there are a few less obvious places where the money will be flowing. While many will be in North Texas primarily for the game, most will be looking to paint the town before and after the Steelers and Packers kick it off on Sunday evening.
If you want to hob-nob with some of the music industry's biggest stars you better bring some serious dough. If you want to check out Sports Illustrated's Saturday night party with the Black Eyed Peas and David Guetta, your cover charge will run you $1,500. You could also hang out with Prince at his "intimate" party tent for the same price. If you'd rather "slum it" and save a few bucks, you could always check out Diddy's get together for only $750.
But let's say your idea of a football party is a full day of tailgating, you could always rent out a spot in a garage near the stadium, equipped with access to a restroom, security and everything you'd need for some bad-ass tailgating. The asking price: a cool G. That's right, $1,000. There are other spots available in the same vicinity for under $600, but they don't have restroom access. When you think about it, it might be worth it to pay $400 bucks for your own toilet at a game where there will be in excess of 100,000 people.
Whether it's coming from the fans or corporations, there are some big bucks being spent at this year's Super Bowl, and everyone from pizza parlors to television networks to nightclubs are reaping the financial benefits.
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